By Corran Addison

By 1999, when you’d go to buy a kayak, you had the choice of about 15 models, in three sizes, in eight colours, from each of the 10 brands, available in three shops, all within an hours drive. Now, 20 years later, Confluence, the once proud owner of Dagger, Perception and WaveSport, shut down two of the three whitewater brands – after all you don’t need three brands losing money, when you can have just the one.

Corran Addison is a regular contributor to the Paddler magazine and owns Soul Waterman

www.soulwaterman.com

The state of WW kayaking

Forgive me if I get a bit wonky here, and if this deviates a bit from my usual tack of giving specific instruction on some paddling related topic, but I feel that the state of the whitewater kayaking industry is in jeopardy, and this needs to be addressed.

The simple fact is that whitewater kayaking as an industry is not healthy. It is constantly on the verge of financial collapse. Little more than a cursory glance at the last 20 years is all it takes to see the dire straits that it’s in, and if you love kayaking, especially white water kayaking, this is cause for concern, to you, the end user.

Let me back track here a little and give this context. My first point is that the information and details are going to be somewhat slanted to North America, as this is the market with which I am most familiar, and have the most details. In broad strokes, all this applies equally to Europe, but I will be using the North American market to make my point.

In 1999, the retail price of a kayak was $1,000. In today’s money with inflation, that’s $1,480. Let’s just call that $1,500 to keep things simple. If nothing had been changed in the way kayaks were built (cost of goods) and there was no other change influencing cost of goods beyond simple monetary devaluation, a kayak today should sell for $1500, just to be the same as it was in 1999.

But this is inaccurate. In 1999, the cost of a kayak’s outfitting was about 10-15% of the total manufacture cost, which was little more than a plastic seat, plastic thigh brace, basic footrest and a basic backband. Today’s kayaks, with advanced ‘turn-key’ outfitting, are often as much as 50% or more of the cost of the kayak. This alone should add 30% more cost to that $1,500 price tag I mentioned.

Plastic has improved significantly in 20 years, and the cost has gone up too. In 1999 a Superlinear was about $0.99/lb. Today it’s close to $3/lb for the best plastics. That’s three times the cost. And we put more plastic in the kayaks because they take a lot more abuse. Shipping a kayak used to cost $80. Now you’re lucky if you can ship one for $300. The list goes on and on.

If you total up all the manufacturing costs, overheads and everything else, and make the same margins (manufacturer and dealer) that we were in 1999, the ‘natural’ price for a kayak today would be somewhere between $2,300 and $2,500!
I’m imaging your blank stare of disbelief.

a comparable industry

But let’s have a look at a comparable industry. One of my suppliers happens to make mountain bikes. One of these bikes costs about $150 more to make than my kayak does. It retails for $4,000. My kayak retails for $1,500. That on its own should tell the story.

To expand the mountain bike model a little, consider this. From 2018-2019, full suspension bikes that retail for under $1,000 grew in sales by about $5 million. Bikes in the $3,000-$3,500 range grew by about $38 million, and bikes over $5,000 grew in sales by over $55 million.

Of course the mountain biking market is far larger than white water kayaking, and it’s a pipe dream that will never come to fruition to even imagine that we could have those sorts of numbers, but what the above does tell us is that when people love a sport, they’re normally willing to pay what’s necessary to get the very best. In kayaking, the end consumer nickelled and dimed the entire industry, from manufacturer to dealer, into submission… and near bankruptcy.

No one, even the longest standing or largest selling brand owners, are getting rich. They live modest lives and do it because they love kayaking.

This ‘profitable’ mountain biking industry is able to continually reinvest in itself, improve bikes, dealer networks, and even have money to lobby state legislature to open up trails (and maintain them). They have millions of dollars in demo fleets out in the marketplace at any moment in time, allowing bikers to test.

You know, like kayaking used to have.

Imagine if the kayaking industry had that sort of clout in the UK, and could get some of the access issues that are fought with fishermen revisited and resolved.
Probably very few people reading this article were paddling in the late 1960s and 1970s, but let me paint a picture for you.

If you wanted to kayak, you could not go to a shop and buy one. Kayak shops didn’t exist. While there were some early ‘boat builders’ popping up in Europe, there were non-existent in the USA. If you wanted to kayak, first you had to build a kayak. You needed to borrow or rent a mould from the local club, rent a book from a library on boat building, find somewhere to make the boat, buy the materials, and over several weeks, painstakingly build yourself a kayak. You probably didn’t get much choice as to design – you just got the mould that the club had.

Then along came an entrepreneur called Bill Masters, who decided to take his fledgling kayak company that was producing fibre-glass kayaks and make plastic ones. He was not the first – Tom Johnson and Pierre Arquette both were making a plastic kayak a few years before Perception, but like all kayaks at the time, you bought the kayak directly from the guy who made it.

Bill had this idea that rather than selling direct, he’d sell to a shop, and have a network of these shops all across the country (and world). This would mean that paddlers everywhere would be able to try and buy his boats, rather than sales always being regional to where X or Y boat builder was situated.

His idea caught on, and by 1999 there were over 800 speciality dealers across North America who sold white water kayaks. Larger towns would have 3-4 dealers in the same town, all carrying the full lines of two to three brands of kayak, in all sizes and all colours. All in inventory, all ready for you to buy on the spot, and go kayaking that day.

Dealers were making 40% profit margin on their cost (understand that this is gross, not net profit – average operational costs are about 30%, so in reality after paying rent, employees and so on, the dealer was making 10%). Manufacturers were making about 40% margins on cost of goods (also gross, not net).

a healthy, growing industry

The result was a healthy, growing industry. In 1984, if you lived in the USA and you wanted to buy a kayak, your choices were red, yellow, blue or neutral. Of one model. By one brand. The Perception Dancer. Your decision-making was all about which colour, since there was only one boat model you’d seriously consider.

By 1999, when you’d go to buy a kayak, you had the choice of about 15 models, in three sizes, in eight colours, from each of the 10 brands, available in three shops, all within a one-hour drive. Manufacturers sent sales reps, and pro teams to events all over the country. They put on events, and supported the clubs and stores. They would do mass demo days, and sunk hundreds of thousands of dollars into R&D. Every year the sport reinvented itself. Anyone who lived through those golden years from about 1995 to 2003 will remember how exciting it was.

So, what happened? How did we end up here, what are the effects, how do we fix it, and why should you care?

Exactly why the industry or dealers (it’s both hard and misleading to point fingers) worked so hard to suppress the retail price of kayaks well under inflation and the mounting cost of goods is not clear, but it happened. In 2017 there were brands still selling kayaks for $1,000 (let me refer back to the ‘natural’ price they should be of $2,300 for context). This is a retail price that’s barely over the cost of goods plus overheads. It leaves no room for the dealer and in fact, many brands were left with no choice but to cut the dealer out of the loop.

Suddenly, brands that had global distribution went back to being a regional thing. Like in 1970. It was very hard to get their boats outside of their region, and almost impossible to try before you buy.

a loss maker

Those that have attempted to keep a dealer network had to cut their margins down so significantly, that white water became a loss maker. Other products the company made were subsidizing white water kayaks, effectively creating a situation where every kayak sold results in a deficit to the company. Confluence, the proud owner of Dagger, Perception and WaveSport, shut down two of the three whitewater brands – after all you don’t need three brands losing money for you when you can have just one.

Even the number one whitewater brand in the world, Jackson, relies on redneck fishermen to buy $800 coolers to pay for their white water kayak habit.

And dealers, once a massive network sprawling across the country, hosting events, carrying every model in every size from every manufacturer, have all but disappeared. We are left today with little more than 100 dealers in North America, compared to the 800 twenty years ago. The gross margin they’re making is 30% at best, on a product that costs three times the price to ship as it did when overheads were 30% of cost of goods. Every time a dealer sells you a white water kayak, they lose money. Literally lose money.

online direct

Even the traditional argument of making this deficit up by selling you a helmet and dry top has changed. Now people buy these things online direct from the manufacturer, cutting the dealer out of the loop, or forcing the dealer to lower the price significantly, thereby making even soft goods a money losing proposition.

So how do they make money? They don’t. They closed their doors. And now, most people need to drive hours and hours just to get to the closest dealer, who maybe carries one or two brands, and only the bestselling models, in a few colours. They can of course order you what you want – if you don’t mind waiting two weeks.

Starting to sound like 1970? Well this is where we’re going – rapidly!

We’re heading into a new world that harks back to the old one, where you buy your kayak from the closest local manufacturer, with a choice of models that only changes every few years. And if you want a kayak that comes from another region, you’re ordering it online, waiting weeks to get it, and hope you like it, because you can’t send it back if you don’t. This isn’t a shoe.

A comment I’ve heard before is that consumers could justify spending $1,000 on a kayak in 1999 (again – $2,300 today if all things went up equally to final price) because designs were evolving so fast. You wanted the latest exciting design, and would pay a hefty price to get it. Those that couldn’t, were forced to buy used boats six months old.

So many ideas

Do you think that one day we just suddenly ran out of ideas? An entire industry, collectively, just had nothing more to give? This is simply not realistic. Designers today have just as many ideas on how to make boats better, from shape, to outfitting and materials. The problem is not ideas – it’s the money to develop those ideas.

When you’re selling at kayak at a net 10% loss, you simply cannot justify throwing $100,000 at its development: a dozen prototypes, tested over a year, all over the world, by a half dozen paid team paddlers, all travelling on your dime.

The reason why designs are not evolving, is because consumers have not been willing to pay what a kayak is worth.

This cannot be fixed overnight. It’s a process, and I don’t have all the answers, even if I have over the last few years identified much of the problem. If you, the consumer, wants to have access to quality boats, of all kinds, from shops that let you demo boats, close to where you live or paddle, and want to see improvements in materials, and designs, then you’re also going to have to come to grips that you’ve been paying far too little for your kayaks, and that this has almost destroyed the industry that provides the toys that we all need to do what we love so much.

a quantum shift

There has to be a quantum shift in how paddlers think about their kayak, and the value that they ascribe to it. It is simply not sustainable, or logical, to think that a kayak today should be less than half the price it was 20 years ago.